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Merchants Identify Roadblocks to PoS Business



Merchants making use of point of sale (PoS) terminals for transactions at their locations have reeled factors hindering the use of PoS device as a means of payment and urged actions to address them.


Among the roadblocks identified include; lack of credit backing for PoS transactions by banks; +two days settlement arrangement; placing of burden on customer for technology failure among others.


The merchants disclosed this at PoS innovation Summit organized by Global Accelerex in Lagos.


Sarafadeen Fasasi, president, Association of Mobile Money Agents in Nigeria, said that the practice of + two days settlement arrangement for transaction on the PoS is a major challenge in the business of using the device as a means of payment.


“By policy, settlement should be done in one day of the payment, but today that is not obtainable in practice as what we get is + two days. This means that if a merchant gets payment through PoS device today by 10am he will not get value in his account till 6pm tomorrow which means he has lost two days of business. This settlement system slows down business for us merchants as well as does not optimize the benefits of PoS system,” he said.


He also decried lack of investment by some banks in the PoS business where they are reluctant to acquiring additional PoS terminals as well as providing credit backing for transactions over the device.


“Just like as it is with ATM where banks load money to the machine, banks are expected to provide credit backing for transactions over this device, but today very few banks are doing it others are declining,” he added.


Fasasi however, urged banks to invest in PoS for agent networks as a way of achieving PoS magic. According to him, ‘agent networks need informal approach to bring to financial inclusion


Corroborating Fasasi, Mr. Prakash Keswani, managing director, ARTEE industries (SPAR), stated that the system of transferring burden of technological failure in the process of payment through PoS on the customer is worrisome instead of the provider of the device.


“We often face with a situation where transactions did not go through and customers account debited and not reversed immediately expecting the customer to go to their bank and fill one form or the other. In some cases customers insist on going with the goods they purchase,” he explained.


A report from NIBSS made available to Nigeria CommunicationsWeek shows that 51 percent of volume of transactions in 2016 occurred in Lagos with 32.7M, followed by Abuja with 6.8m and Port Harcourt 5.1M.


It further stated that between January and July 2017, only 15,093 terminals were added to the network.

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CBN Unveils Regulation for Payment of Bills



Godwin Emefiele, Governor of the Central Bank of Nigeria

Central Bank of Nigeria (CBN) has unveiled regulations for the payment of bills in the country, explaining that the move was to document the minimum standards that must be complied with for the processing of bill payment transactions.


In a circular released on its website at the weekend, the apex also stressed that the regulation is also to identify stakeholders in bill payment system space, ensure achievement of the vision of a ‘nationally utilized and international recognized’ payments system in Nigeria as well as to ensure adequate protection for the stakeholders in the bill payment system space.


According to the central bank, “Any person or entity desirous of operating a bill payment platform shall apply to the CBN for a license or be integrated to a duly licensed PSP.”


In addition, “All Inter-Bank transactions initiated and authorized on the bill payment platform shall be cleared via the Nigeria Clearing System and settled via Real Time Gross Settlement System (RTGS).”


Likewise, “Each component payment method implemented on the platform shall be in accordance with the rules issued by Central Bank of Nigeria to guide the conduct of market activities for relevant payment channels.”


On the operational procedure, the apex bank said, “There shall be a Service Level Agreement (SLA) executed between the platform provider and the Biller, as a condition for on-boarding,” which “shall provide the terms for engagement, roles and responsibilities of the parties, minimum service delivery commitments, obligations of the parties and penalties, as applicable.”


The CBN further said, “SLAs shall be reviewed periodically to ensure alignment with industry/regulatory changes, or appropriate provisions made to take cognizance of mandatory changes that may come into play after implementation.”


It noted that the minimum commitments to service availability would be defined and incorporated in the Dispute Resolution System (DRS) and SLA, and properly communicated to the users of the service.


The bank said transaction status upon completion must be sent by the biller to the payer and a procedure shall be in place for change management and shall include major releases, maintenance calendars and conditions for emergency upgrades and notification process.


On the dispute resolution system (DRS), the apex bank said payments shall be final and irrevocable and be consistent with the provision of the circular on the Statement of Payments Finality.


“All requests for refunds/recalls shall be via a dispute resolution system or other supplementary rules that guide the operations of the relevant payment method.


“Service Providers shall make an automated dispute resolution platform available to facilitate seamless resolution of complaints.


“Disputes arising from Bills Payment transactions shall be resolved amicably amongst the parties in line with the provisions of the guidelines on Operations of Electronic Payment Channels in Nigeria,” the CBN said.


It disclosed that, “Each platform shall be able to receive payment for multiple billers, clear transactions and settle such transactions through existing settlement mechanisms.”


On the scope of the regulations, the central bank said it covers bill payments on various payment channels and any payment platform that seeks to integrate the payment side of commercial activity and merchant aggregators in Nigeria.


“The payment methods include Cheques, Cards, Direct Debit, Instant Payments, and Automated Clearing House, etc,” it said.


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Nigerians Lose Faith in Banks as 2m Shun Services



Despite Central Bank of Nigeria’s (CBN) effort to promote financial inclusion, the Nigeria Inter-Bank Settlement System (NIBSS) banking industry statistics shows that the number of customers using financial services reduced in 2017.


The statistics obtained from the NIBSS website on Sunday, showed that the total number of bank customers dropped from 61 million in 2016 to 59 million in 2017.


Similarly, active bank accounts reduced from 65 million in 2016 to 63.5 million accounts in 2017.


According to NIBSS, the banking sector, however, made great strides in linking customers’ account using the Bank Verification Number (BVN).


The report showed that linked BVN accounts grew from 26 million in 2016, to 41.3 million in 2017.


According to a banking industry source, the reduction in banking customers is not unconnected to the Federal Government’s declaration to fight against corruption.


“When Buhari assumed office, many people abandoned their accounts, especially civil servants because of fear of investigation.


“While some out rightly closed down their accounts, others opted for gradual withdrawal so as not to raise alarm,’’ the source said.


The source, who works at one of the top five banks in the country, blamed the BVN for the low patronage of banking products, especially in the rural areas, where awareness was already very low.


A bank customer, Mr Olaitan Alagbe said that she closed some of her accounts due to unnecessary and illegal charges by banks.


“First of all, the interest rate is next to nothing, so there is little reason to keep your money at the bank when you can turn it over doing other businesses,” she said.


Another customer, who preferred to remain anonymous said he opened several accounts during the Ponzi scheme boom in the country, but was forced to abandon them after the schemes crashed in late 2016 and early 2017.


However, a source at the CBN said that the reduction in the number of banking customers was caused mainly by the introduction of BVN.


“The reduction may not necessarily be a bad thing. For example, many people opened accounts using different variations of their names.


“A person bearing Musa Salisu Mohammed, may have other accounts as Salisu Mohammed or Musa Salisu.


“So with the introduction of BVN, such customers were forced to regularise their names, however, some opted to close down their accounts, which resulted in the reduction of active bank accounts and customers,’’ the source said.


The CBN source was, however, optimistic that the financial inclusion strategy of the bank would succeed in bringing in more people into the formal banking system.


The Financial Inclusion strategy aims to ensure that major bulk of the money in the economy remains within the banking sector.


A major challenge in the financial inclusion process is how to ensure that the poor rural dwellers are carried along considering the lack of financial sophistication among this segment.


The CBN, Money Deposit Banks, Micro Finance Banks and other stakeholders are currently implementing different policies designed to enhance financial inclusion in the country.

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Benue Deploys Remita Software to Tame Payroll Fraud



Benue State Government has confirmed the deployment of a new payroll system into the state Civil service in the bid to check fraudulence practices on its payroll.


Mr David Olofu, State commissioner for Finance and Economic Planning, who confirmed this, revealed that the state has engage SystemSpecs’ Remita in managing the state’s salary payment and that this has really helped to get rid of fraud on the payroll.


It was gathered that the sum of N3.5billion salary fraud has recently been uncovered on the Benue State Civil Service payroll following a verification exercise to ascertain the over bloated wage of the state.


And since the deployment of the Remita software about 500 duplicate names and over 20 duplicate Bank Verification Numbers (BVN) were uncovered through Remita software.


Olofu said, “It is painful to me as commissioner for Finance to start something that I think will bring relief to us as a state.


“To me, it is important to look at what we have as against the solution we are presenting and to also look at the agreement and see if there is any shady deal. SystemSpecs did not come from heaven, they have been recommended,’’ he said.


He said that the Federal Government was presently using its platform, Remita for the payment of its workers’ salaries.


Olofu insisted that the payment of salaries needed a platform regardless of whether the payroll was prepared by civil servants or not.


“We must always use a platform for the payment of workers’ salaries, before this time, we were using the U-pay platform.


“When we came in, we discovered that salaries were paid through the platform but the system had many problems, which included duplication of names and we wanted to find out where the problems were coming from.


“We agreed in the ministry to do a trial with Zenith Bank to see if the challenges were as a result of normal banking problems or were caused by civil servants, that trial exposed a lot of issues including duplication of names on the payroll.’


The software has made enormous impact on the Nigerian economy in a relatively short time, and has attracted a global recognition for its role in engendering accountability and transparency in both private and public sectors.


A total of six states including Kano, Zamfara, and Benue have adopted Remita in their payroll management strategy. At the federal level, the smooth running of the Treasury Singly Account (TSA) is also facilitated by the Remita platform.


Remita is more than just a payment software, it also has HR and payroll functions which help businesses maintain a comprehensive, online employee personal and payroll data.


Licenced by the Central Bank of Nigeria (CBN), Remita is developed 100% in Nigeria to the highest international standards, and it has significantly assisted to revolutionise the e-payment industry in Nigeria.


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